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BHP Group’s profits drop 8% in H1-18/19

BHP Group’s profits drop 8% in H1-18/19

Mubasher: The world's biggest miner BHP Group reported an 8% profit decline in the first half of fiscal year 2018/2019, pressured by the retreat in copper earnings.

During the July-December period of 2018, the Australia-based firm’s underling profit from continuing operations dropped to $4.03 billion, against $4.40 billion in the year-ago period, according to the company’s statement on Tuesday.

The global resources company’s profits missed consensus estimates compiled by Vuma Financial of $4.209 billion, as BHP Group had “a number of tax settlements in the half and that changes [its] tax bill somewhat," BHP Group’s CEO Andrew Mackenzie told CNBC.

Meanwhile, BHP Group’s revenues grew 1% to $20.74 billion during the first half of FY18/19.

Iron ore mining revenues, BHP's largest sector, went up 2.7%, while copper revenues plunged 17.3% because of unplanned production outages at its Olympic Dam and Spence copper mines.

Over the last six months of 2018, copper earnings before income tax, depreciation and amortisation tumbled about 40%.

However, the global resources company increased its copper production forecast for 2019 to between 1.6 million tonnes and 1.7 million tonnes.

"This has been a phenomenal year in terms of cash back to shareholders, $13 billion — that's a record for the half and of course that was enabled by the very successful sale of [BHP’s] onshore US business," Mackenzie noted.

BHP revealed that it reduced its net debt to $9.9 billion during the six-month period, which is lower than its target of $10 billion to $15 billion.